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Major Relief As Fuel Rates Slashed

In a much needed relief for people across the country, petrol prices were slashed by 59 paise in Mumbai and 60 paise in Delhi today, according to ANI report. Meanwhile, Diesel prices went down by 59 paise in Mumbai and 56 paise in the national capital. On Wednesday, Petrol prices stand at Rs 77.83 per litre in Delhi and Rs 85.65 per litre in Mumbai. The price of Diesel is now down to Rs 68.75 per litre in Delhi and Rs 73.20 per litre in Mumbai. The rates of petrol and diesel went down after 16 consecutive hikes in rates triggering political slugfest.

Petrol and diesel prices were hiked yesterday for the 16th day in a row even as oil prices were mixed. The fuel rates were hike 15-16 paise on Tuesday. According to Indian Oil website, petrol price in Delhi is Rs 78.43 a litre; Kolkata Rs 81.06 a litre; Mumbai Rs 86.24 a litre; Chennai Rs 81.43 a litre. Diesel price in Delhi is Rs 69.31 a litre; Kolkata Rs 71.86 a litre; Mumbai a 73.79 litre; Chennai a litre 73.18. In Mumbai, the price rose beyond the Rs 86 mark on Monday.

These rates went down after it has been learnt that rising prices of fuel are likely to weigh on the Reserve Bank’s rate-setting panel, Monetary Policy Committee (MPC), at its 3-day meet from June 4. This is the first time that the Monetary Policy Committee will meet for three days due to “administrative exigencies”. In the normal course, it meets every two months for two-days before making public its monetary policy stance.

“The MPC will meet on June 4-6, 2018 for the Second Bi-monthly Monetary Policy Statement for 2018-19. The resolution of the MPC will be placed on the website at 2.30 pm on June 6, 2018,” the Reserve Bank of India said in a statement today. The MPC was originally scheduled to meet on June 5, but the meeting has been advanced by a day. The monetary policy review will take into account the retail inflation which rose to a 4-month high of 3.18 per cent in April mainly on account of increasing prices of petrol and diesel. RBI mainly factors in retail inflation, based on the Consumer Price Index (CPI), while deciding the key interest rate.

The domestic retail petrol and diesel prices are at all time high on account of rise in crude oil prices in international market. High petrol and diesel prices can further fuel inflationary expectations. At the April 4-5 MPC meeting, RBI Deputy Governor and member Viral Acharya had cited revival in investment activity and an improvement in capacity utilisation for his switch from a neutral stance to shift “decisively to vote for a beginning of withdrawal of accommodation in the next monetary policy meeting in June”.